Nissan dealers may have been surprised to read here last week that the automaker's CEO, Hiroto Saikawa, intends to change the company's game plan in the U.S. this year.
Those vexing ways that have brought Nissan sometimes unwanted headlines in recent years — aggressive incentives, a booming reliance on fleet sales and an unrelenting pressure on dealers to move the metal to hit market-share targets — are about to change, Saikawa tells us.
In their place? Lower incentives, less fleet business, a focus on sustainable growth instead of market share, and dealer profitability.
That's a sea change. And it's one that must surely make retailers eager for details.
But one Nissan practice is unlikely to disappear in the coming months: its dealer incentive program.
Saikawa didn't address the long-standing sales incentive-and-reward plan, once known as a stair-step program. It has irritated many dealers throughout this decade. Nissan has been upfront in acknowledging that the strategy hasn't always worked to perfection, and on a few occasions, the factory has rewritten the program rules with the help of its national dealer advisory board.
But throw it out? Not likely. Just as car dealership sales personnel are offered incentives to increase business, Nissan has offered its dealers incentives to reach higher. And in recent years, they did and sales climbed.
More likely, Nissan's U.S. management will try to implement a more effective approach to dealer incentives. But what kind? A plan that encourages a store's brand-enhancement efforts, one that rewards a dealer for improving customer-satisfaction grades, one that benefits store managers for improving their market share in parts and service, or for increasing Web traffic, or improving results in a previously overlooked product segment, such as full-size pickups? Those are the kind of factory incentives that boost dealer profitability and raise Nissan's overall brand value.
What Saikawa's sea change is likely to demonstrate is that factory incentives can be used in different ways.